On this episode, Paul provides three tips for when a customer wants less than your best solution.
Why is the customer considering a different option?
Remind the customer of the value of your premium solution.
A different product means different competitors. “Conduct an apples-to-apples comparison with your new competitors.”
Don’t forget your company and yourself.
“If you offer a better solution, you don’t need to be the cheapest.”
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How do you sell down from a premium option?
(Transcribed from podcast)
On today’s episode, we’re going to talk about selling down and what that really means. On a recent coaching/webinar I had a great question. The salesperson said, “Paul, I do a good job of selling our premium type of solution. However, if I need to sell down, if I need to sell a less expensive option, a more commoditized type of product, I struggle there.”
And here’s what’s basically happening. Think about it from the salesperson’s perspective. They’re leading with the premium option. The buyer has expressed interest in that, and then, all of a sudden, the buyer decides they don’t want to buy the premium option anymore. So now they are forced to put together a new proposal highlighting a less expensive option, a more commoditized option, because this, I guess, lower-scale product, it brings in a new set of competitors. There’s more competitors operating in that space. So, the salesperson is wondering how do you do that? It’s a great question and it’s an understandable challenge. So, we’re going to get into that question on today’s show. Again, the question is how do you sell down from a premium option?
Before we get into that question, a quick shout-out to our sponsor, Andrea, over at The Creative Impostor Studios. Andrea, [you’re] doing a great job in the podcast. In fact, I didn’t tell you this, but last month we had a record month of downloads. And a lot of that is because of your help. So, thank you for your help. And to all my listeners out there, if you’re thinking of starting a podcast, if you have an idea for a podcast, Andrea is here to help. We’re going to have a link to her website on this episode’s webpage and make sure you check it out.
Also, we’ve got big news coming up. Later this year in September-ish timeframe, I’ve got some big news. New book is coming out. A new book on how to sell through tough times. More details to come on that later.
But until that book is available, pick up your copy of Value-Added Selling. One of the concepts I’ll talk about on the show today is in the book. So make sure you pick up your copy of Value-Added Selling. It’s available on Amazon [or] wherever you get your books.
Back to that question: How do you sell down from a premium option? Again, you lead with your best option, the option you believe is going to be the best fit for the customer, but the customer tells you, “Hey, we’re not going to buy it.” They might’ve expressed interest initially. Maybe they don’t have the budget, but for a number of reasons, they’re telling you, “Hey, you need to pare down that solution.”
Now you have to lead with a different type of solution. In this case, the solution is a little more commoditized. The buyer views it more of a commodity-type of product. So, the salesperson is now having to compete with a broader range of competitors that they didn’t have before when they were selling the premium option.
Here are three tips to address this challenge. The first thing I would do is I would ask the buyer why they are considering a different option. That is critical. We need to understand why they are paring down their needs. We need to understand why they no longer need that premium type of solution. And it’s up to you as the salesperson to challenge them a little bit. And I would ask them some questions. Preface those questions by saying, “Mr. Customer, we spent a lot of time going through your needs, understanding what you’re trying to accomplish. And we really believe this is the best fit. And, in fact, you also mentioned that this was a great fit. What’s changed since our last conversation?” Leave it open-ended. Give them a chance to explain. They might say that it’s price. They might say that their needs have changed. Whatever it is, you need to get to the root-cause of why they are changing from their previous call. You’ve got to figure that out. You’ve got to understand it.
Now, I would also challenge the buyer. If they’re getting cold feet because they don’t want to spend that much money, or they’re nervous to spend that much money, or the uncertainty of the current environment is forcing them to cut their budgets, whatever it might be, challenge the buyer a little bit. Remind them of the value of that solution. Remind them of the impact and how it’s going to help their business and how it can help them grow and make more money or save on costs. Whatever your value proposition is, you need to reinforce that to encourage the buyer to move forward.
When people are on the fence of whether they should spend that money or not, sometimes they need a nudge. They need to know that it’s okay to spend more than they were expecting to. Give them permission to do that. Challenge them a little.
The second thing we want to do, if they’re not budging and it’s clear that they need to scale down their solution, conduct an apples-to-apples comparison with your new competitors. If they are now bringing in other competitors that have less expensive options, you’re having to compete with them, do a side-by-side comparison and figure out what makes your product different, or it makes your service different, whatever it might be. Figure out what makes you different and what makes you better.
Now, it’s not enough to say to the buyer, “Okay, in an apples-to-apples comparison, our solution is better because we do this. We provide better after-market support; we provide more productivity. Our solution enhances your productivity.” All of these things sound great, but we need to provide some proof around it. Remember, proof is more valuable than an opinion. So, for any key difference that you highlight between your product and that new competitor, you need to highlight that difference with proof. Be able to share some metrics: some studies, case studies, technical documents. Whatever it might be, be able to demonstrate what makes your product different or better. That’s the second thing we need to do.
And the third and final thing we need to do is highlight the value of your company and the value that you bring as the salesperson. Remember, just because they’re buying a different product, they’re still getting all the value that comes from your company and from you as the salesperson. From previous podcasts, we talked about this. This is what we call that three dimensions of value: the product, the company, and you as the salesperson. So, when you’re talking to the customer, you might even ask them and say, “Okay, looking at all these options here, for a moment, let’s just talk about our company and then me as your salesperson. Let’s assume for a moment, Mr. Customer, that our product was exactly the same. And let’s assume that the price was exactly the same. If the product and the price were exactly the same, who would you decide to go with and why?”
What you’re doing here is you’re prompting the buyer to talk about your company value added: the value that you bring as the salesperson. And if you’ve done a good job up to this point, the customer is going to say, “Well, if all things were equal, I would buy from you and your company.”
“Okay, great. Why would you do that? What would lead you to that?” And they might say, “Well, it’s your after-market service. It’s your ability to support us with the technical stuff, the inventory that you have.” They might go into a myriad of different reasons as to why they would choose you. What you’re doing there is you’re selling the buyer on your personal value and the value that your company brings to the table.
Now here’s the reality. If you are now selling a product that is a little more commoditized and it’s lumped in there with a bunch of different competitors that kind of look the same, sound the same, feel the same, your pricing differential is going to be pretty close. In fact, I’m guessing it will be within 10 percent. Your price is going to be within 10 percent of your competitors’.
Now, if you offer a better overall solution, meaning your product, your company, and you as a salesperson, you don’t need to be the cheapest. In fact, our research shows that you can be within 10 percent and you don’t need to discount. You can hold the line there.
So again, three tips when you’re facing this situation. Number one: ask the buyer why they are downgrading in the first place and challenge them a little bit. Number two: conduct an apples-to-apples comparison to see which product is actually better. And then the final suggestion: highlight the value of your company, and then the value that you bring as the salesperson. Remember to present a total solution, not just the product.
Make it a big day.